It is important that your Gift Aid declaration forms are up to date. HMRC issued new model declarations in 2015, the main change from the previous forms being a requirement to include a statement that the donor confirms their understanding that if they pay less income or capital gains tax in the year than the amount of Gift Aid claimed on their donation in that tax year it is their responsibility to pay the difference. This requirement is reflected in the list of information that a declaration must include. Model declaration forms can be found on the Government website.
Gift Aid Small Donations Scheme (GASDS)
The Gift Aid Small Donations Scheme (GASDS) allows eligible charities to claim top-up payments from HMRC on small cash donations that they receive. The scheme applies to cash donations of £20 or less (totalling up to £8,000) for which no Gift Aid declaration has been obtained. From 6 April 2016, you can claim up to £2,000 in a tax year or £1,250 for earlier years. Further detail can be found on the Government website.
The GASDS rules were updated from 6 April 2017 to widen the scope:
- small donations made by contactless payments will be eligible
- a widening of community building rules, allowing charities to reclaim more Gift Aid under the scheme
- simplify the eligibility criteria to increase access to the scheme.
Gift Aid Donor intermediaries
A donor intermediary is someone who has been authorised by a donor to create and give Gift Aid declarations to a charity, such as Just Giving. It used to be the case that the donor must have given a Gift Aid declaration for each new charity they gave to. For example, if a donor made donations to 10 new charities the donor would also have to complete 10 separate Gift Aid declarations. From 6 April 2017, the new authorisation process has made it easier for donors to Gift Aid their donations to charities when donating through digital channels by authorising an intermediary to create Gift Aid declarations on that donor’s behalf for the rest of the tax year. The declaration will last until the end of the tax year in which the authorisation was given. Once the authorisation has been given the intermediary can create Gift Aid declarations on the donor’s behalf for the rest of the tax year and Gift Aid will automatically be claimed on those donations.
Retail Gift Aid
This applies to charities which sell supporters goods. Where a charity, or its trading subsidiary sells donated goods, they can ask the owner if they wish to donate the sale proceeds to the charity. If the owner agrees, Gift Aid can be claimed by the charity on the net sales proceeds subject other conditions being satisfied. If you operate the Retail Gift Aid scheme, you will be able to send end of year letters to donors every three years when goods raise less than £20 per year. This is an increase from the previous system, whereby charities had to write to donors every year.
Scottish taxpayers
Following the announcement of the Scottish Rate of income Tax, which is now in effect, HMRC have confirmed that there will be no change in position for charities claiming Gift Aid on donations from Scottish taxpayers. Charities will continue to receive 25p per £1 of Gift Aid donations they receive; which is in line with the basic rate of tax in the rest of the UK.
Get in touch
If you have any questions about gift aid donations, please contact mail@ct.me.
